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Was That a Costly Device?

Wed, 5 May 2010, 07:09 AM (-06:00) Creative Commons License

In 2000, the US government issued said a backup system to turn off deepwater drilling systems was an essential safety component. In 2001, the industry complained that there were significant doubts about such systems. In 2003, the government decided that, what do you know, more study was required.  And the Minerals Management Service reported that the devices are not recommended because they tend to be costly.

The devices tend to be costly.

The device cost about a half-million dollars.  Well that’s costly, isn’t it?  Well…

Cost: The Deepwater Horizon replacement cost is approximately $550 million.  BP is spending more than $5 million per day on the clean up right now, and the costs could grow horrifically if the gusher keeps spewing oil unchecked for months. You tell me: Was that a costly device?

Benefits (risks): Risk is defined as the probability of a failure multiplied by the severity of the consequences should the failure occur. So what is your estimate on the severity of the consequences of filling the Gulf with oil?  Now, you tell me: Was that a costly device?

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